Most Important Entrepreneurial Tool – The Dynamic Pro Forma

Risk management – how the risks have been (or will be) contained or marginalized.

The pro forma creates an idea of what actual results could be if the inputs/assumptions hold true; it must predict, at least, an acceptable return (and enough cash for debt coverage) compared to the risks, for a project to succeed (or get financing). The pro forma analysis is simply an initial screening tool for investors to quickly learn if a project is worth their time and trouble (and, potentially, investment of funds).

A common format is a static pro forma, where the financial results are displayed only as values, or formulae with locked input cells (i.e., the entrepreneur cannot change the input values). The results are restricted to one scenario by the design of the spreadsheets. On the other hand, a dynamic pro forma has the financial results displayed as formulae, which grab data from unlocked input cells (i.e., the entrepreneur can change the input values).

The ROI is just the tip of the iceberg of the dynamic pro forma, which does not simply create a financial prediction, but reveals what is behind the numbers. A dynamic pro forma clearly illustrates how a financial result was determined, reveals the project risks, and defines the venture road map, resulting in improved odds of project success.

Sixth Element

is a “boutique” consulting firm specializing in concept planning, start-ups, and early-stage companies in the bioeconomy. We provide C-level consulting services for inventors, entrepreneurs,investors, and public sector agencies. Sixth Element helps create small businesses.

Managing Director

is Dr. Gerald Kutney, Ph.D. in chemistry, who has two decades of executive experience with global corporations and entrepreneurial enterprises in the forest bioeconomy. He brings the innovation of research, the financial discipline of big business, and the spirit of entrepreneurship.

Consulting Services

include investor-grade pro forma design and analysis, feasibility studies and business plans, technology/venture vetting and audits (see Projects for recent studies). Sixth Element works with its clients to prepare for the investment community.

What is the Sixth Element?

The sixth element of the chemical periodic table is carbon (symbol “C”). The replacement of fossil-fuel carbon by biofuels and related renewable carbon is an important option to fight climate change. Dr. Kutney has extensive executive experience in the renewable-carbon sector, especially related to pyrolysis, including torrefaction and biocoal, biochar, pyrolysis oil, and gasification. He has also written Carbon Politics and the Failure of the Kyoto Protocol, which examines the policy challenges for addressing climate change.